$50bn wiped out of Facebook shares
Facebook shares plummeted, their worst fall in more than five years yesterday, dropping 7 per cent and wiping out $50 billion, EU enforcement agencies joined UK and US counterparts sought a warrant for Cambridge Analytica, who mined the data of 50m users to create profiles to target them in the elections, as footage emerges appearing to show its boss offering to organise smear campaign.
The fall in Facebook shares soon spread across the tech groups including Amazon, Netflix and Apple, were all down about 1.5 percent. Their shares rallied sharply in the recent years.
Investors are fearful that regulators will start to clamp down on Big Tech following the revelations about how data at Facebook may have been manipulated.
The President of the European Parliament, Antonio Tajani, said: “Allegations of misuse of Facebook user data are an unacceptable violation of our citizens’ Privacy rights”.
Matt Hancock, Britain’s culture secretary wanted Britain’s Information Commissioner to have more power to make individuals give testimony, backed up by the possibility of criminal penalties.
Cambridge Analytica faces further questions after an undercover investigation by Channel 4 news appeared to show video of Alexander Nix, the CEO of the company, explaining that it could use women to entrap corrupt politicians.
Facebook, however, rejected any suggestion that it violated the consent decree “ We respected the privacy settings that people had in place”.
Cambridge Analytica said it did not hold Facebook data and deleted the data it had when Facebook asked it to.
Channel 4 News said its reporter has posed as a fixer for a wealthy client hoping to get a political candidate elected in Sri Lanka.
Cambridge Analytica said the report had “grossly misrepresented” the conversations caught on camera. “ In playing along with this line of conversation, and partly to spare our “client” from embarrassment we entertained a series of ludicrous hypothetical scenarios. Cambridge Analytica does not condone or engage in entrapment, bribes or so-called honeytraps”.
The current focus in on protecting your data being exploited by third parties, but your data is being exploited all the time. Many apps on your phone will have permission to access location data, your entire phone book and so on. It is just the tip of the iceberg”.
Five years ago, researchers at the University of Cambridge’s Psychometric Centre began to publish cutting-edge work outlining how the social networking site could be used accurately to measure the personality traits of millions of users. By analysing how people use the Facebook and what they “like” researchers found that “ computers’ judgements of people’s personalities based on their digital footprint are more accurate than judgements made by people close to them”.
Christopher Wyle a 24-year-old, a former law student and self-taught computer coder, now turned whistleblower, used the research as a basis of his work for UK-based Cambridge Analytica, a controversial political research firm that says it “ uses data to change audience behaviour”. The group worked for Mr Trump’s successful election campaign. Wylie speaking to the Observer and New York Times newspapers, alleging Cambridge Analytica benefited from the harvesting of Facebook data of more than 50m mostly US users. Helping to predict their political preferences and create ways to influence their votes.
Although the company said it would not reveal its owners, it has been reported that the main investor in Cambridge Analytica ’s parent company is hedge fund billionaire Robert Mercer, who helped bankroll Mr Trump’s presidential run. Steve Bannon, who would later go on to lead Mr Trump’s campaign and become key White House Adviser, was a top executive at the firm.
Who needs Russia, as it turns out it was a software company linked to Facebook that tried to swing the vote for Trump via data mining.